Nokia, the Finnish telecom giant, has recently announced a major restructuring plan that will result in the layoff of up to 14,000 employees over the next three years. This decision comes in the wake of a significant slump in demand for its mobile network equipment and a 70% drop in third-quarter profits.
The company’s profits fell to €133m (£116m) compared with €428m a year earlier. This worse-than-expected downturn has prompted Nokia to take drastic measures to cut costs and secure its long-term profitability. The layoffs are part of a broader cost-cutting drive that aims to reduce costs by €1.2bn by the end of 2026.
The layoffs will affect approximately 16% of Nokia’s global workforce, reducing the number from 86,000 to about 72,000. The company has not yet detailed where the job cuts will fall. However, it currently employs about 37,700 people in Europe, including in the UK, and about 10,500 staff in the US.
Nokia’s CEO, Pekka Lundmark, acknowledged the difficulty of the decision, stating: “The most difficult business decisions to make are the ones that impact our people. We have immensely talented employees at Nokia and we will support everyone that is affected by this process.”
Despite the current challenges, Nokia remains confident about future opportunities. The exact scale of the cost-cutting program will depend on the demand for its products. However, it expects to act quickly in order to save as much as €400m next year and another €300m in 2025.